Dubai opens worlds tallest tower, renames it Burj Khalifa

DUBAI, United Arab Emirates - Dubai opened the world's tallest skyscraper Monday, and in a surprise move renamed the gleaming glass-and-metal tower Burj Khalifa in a nod to the president of the UAE and leader of neighbouring Abu Dhabi - the oil-rich emirate which came to its rescue during the financial meltdown.

A multimedia presentation witnessed by Dubai's ruler and thousands of onlookers at the base of the tower said the building was 828 metres tall.

Dubai opened the tower in the midst of a deep financial crisis. Abu Dhabi has pumped billions of dollars in bailout funds into the emirate as it struggles to pay its debts.

Sheik Khalifa bin Zayed Al Nahyan is the ruler of Abu Dhabi and serves as the president of the United Arab Emirates, the federation of seven small emirates, including Dubai and Abu Dhabi.

Analysts have questioned what Dubai might need to offer in exchange for the financial support it has received from Abu Dhabi, which controls nearly all of the UAE's oil wealth. Abu Dhabi provided direct and indirect injections totalling $25 billion last year as Dubai's debt problems deepened.

Dubai's ruler, Sheik Mohammed bin Rashid Al Maktoum, in recent months has increasingly underscored the close relationship between the two emirates. Sheik Mohammed serves as vice-president and prime minister of the federation.

The developer of the newly opened tower said it cost about $1.5 billion to build the tapering metal-and-glass spire billed as a "vertical city" of luxury apartments and offices. It boasts four swimming pools, a private library and a hotel designed by Giorgio Armani.

The Burj's developers say they are confident in the safety of the tower, which is more than twice the height of New York's Empire State Building's roof.

Greg Sang, Emaar's director of projects, said the Burj has "refuge floors" at 25 to 30 storey intervals that are more fire resistant and have separate air supplies in case of emergency. And its reinforced concrete structure, he said, makes it stronger than steel-frame skyscrapers.

"It's a lot more robust," he said. "A plane won't be able to slice through the Burj like it did through the steel columns of the World Trade Center."

Dubai was little more than a sleepy fishing village a generation ago but it boomed into the Middle East's commercial hub over the past two decades on the back of business-friendly trading policies, relative security, and vast amounts of overseas investment.

Then property prices in parts of Dubai collapsed by nearly half over the past year. Now Dubai is mired in debt and many buildings sit largely empty - the result of overbuilding during a property bubble that has since burst.

Despite the past year of hardships, the tower's developer and other officials were in a festive mood, trying to bring the world's focus on Dubai's future potential rather than past mistakes.

"Crises come and go. And cities move on," Mohammed Alabbar, chairman of the tower's developer Emaar Properties, told reporters before the inauguration. "You have to move on. Because if you stop taking decisions, you stop growing."

Dubai, which has little oil of its own, relied on cheap loans to pump up its international clout during the frenzied boom years.

But like many overextended homeowners, the emirate and its state-backed companies borrowed too heavily and then struggled to keep up with payments as the financial crisis intensified and credit markets froze up.

Meanwhile, speculators who had fuelled Dubai's property bubble disappeared along with the easy money, revealing a glut of brand-new but empty homes and crippling many of the emirate's property developers

Dubai shocked global markets late last year when it unexpectedly announced plans to reorganize its main state-run conglomerate Dubai World and sought new terms in repaying some $26 billion in debt.

The building boasts the most storeys and highest occupied floor of any building in the world, and ranks as the world's tallest structure, beating out a television mast in North Dakota.

"We weren't sure how high we could go," said Bill Baker, the building's structural engineer, who is in Dubai for the inauguration. "It was kind of an exploration ... A learning experience"

Baker, of Chicago-based architecture and engineering firm Skidmore, Owings&Merrill, said early designs for the Burj had it edging out the world's previous record-holder, the Taipei 101, by about 10 metres. The Taiwan tower rises 508 metres.

Work on Burj Dubai began in 2004 and moved ahead rapidly. At times, new floors were being added almost every three days, reflecting Dubai's raging push to reshape itself into a cosmopolitan urban giant packed with skyscrapers.

During the busiest construction periods, some 12,000 workers laboured at the tower each day, according to Emaar. Low-wage migrant workers from the Indian subcontinent provided much of the muscle for the Burj and many of Dubai's other building projects.

At their peak, some apartments in the Burj were selling for more than $1,900 per square foot, though they now can go for less than half that, said Heather Amiji, chief executive of Dubai real estate consultancy Investment Boutique.

She said some buyers may struggle to find tenants at going rates once the tower's expected high service charges are factored in.

"The investment community is quite divided," she said. "They're not sure how it's going to play out."